1

Are your problems someone else’s profits?

John Borger, Scott Buchanan & Mark Matson

Boost YourInvestingConfidencein 3 Simple Steps

20 QuestionsEvery InvestorShould Answerfor Peace of Mind

7 Stumbling BlocksMost Investors FaceAnd How YouCan Leap Past Them

What YOUShould KnowBefore You MakeYour Next Investing Decision

2

Investor Awareness Guide:

The Dilemma That Plagues Every Investor And The Three Simple Strategies That Can Put Your Portfolio

On The Path To Success.

This Guide represents the views, beliefs, and opinions of the author who is the president of Abundance Technologies, Inc., a registered investment advisory firm. Others may have different views and beliefs on the topics addressed in this Guide.

© Copyright 2004-2009 McGriff Video Production, LLC., an Ohio limited liability company and a wholly-owned subsidiary of Abundance Technologies, Inc. This material may not be duplicated in any way without the express written consent of the publisher, except in the form of brief excerpts or quotations for the purposes of review. The information contained herein is for the personal use of the reader, and may not be incorporated in any commercial programs or other books, databases, or any kind of software without written consent of the publisher or author. Making copies of this book, or any portion of it, for any purpose other than your own, is a violation of United States copyright laws.

All investing involves risks and costs. Your advisor can provide you with more information about the risks and costs associated with specific programs. No investment strategy (including asset allocation and diversification strategies) can assure profit, or protect against loss.

This booklet is based on the views of Abundance Technologies, Inc. Other persons may analyze investing from a different perspective. Nothing included herein is intended to infer that the approach to investing espoused in this booklet will assure any particular results.

*Performance results for Matrix Management Styles are for all accounts of each management style under Matrix’s management for at least one quarter beginning with the first quarter of 1993, other than variable annuity accounts, with a minimum account size of $1,000 and that have fees paid directly out of the account and no other fees taken out of the account. These accounts are invested in various passive DFA mutual funds according to the objective of the management style and rebalanced periodically. Actual results of accounts under Matrix’s management may have been materially different from results shown herein because of differences in the inception date of the account and restrictions. Results are time-weighted and dollar-weighted. Gross returns are gross of transaction costs and any custodial fees. Net results are net of investment transaction costs, investment advisory fees, and any custodial fees. Performance results and comparative indices assume reinvestment of dividends and income plus capital appreciation.

McGriffPrinted in the United States of America

All Rights Reserved.

3

Table of Contents

Preface by John Borger and Scott Buchanan page 4

The Investors’ Dilemma page 7

Ending the Investors’ Dilemma page 13

Three Simple Strategies for Investing Success page 14

The 20 Must-Answer Questions page 18

Your Next Step page 22

4

PREFACE BY John Borger and Scott Buchanan

Prepare yourself! Leave your ego at the door. The information contained in this book will cause you to look hard at your current investment strategies. You may even have one of those moments of self discovery. You are likely to discover some “truths” that may set you free to change your investing strategies for the better. The first time I read this book that Mark Matson wrote, I was amazed and blown away by its simplicity yet sophistication. The information contained herein will change your thinking of the financial industry forever. Even though it is an easy read, the depth of information is amazing. The knowledge that Mark outlines in this book is information the financial industry at large wants to keep from you, because they have a huge financial interest in keeping these deceptions alive. The solutions are chocked full of common sense.

Since this book is already full of great information, I would like to focus this introduction on the vast differences between a broker/financial planner and an investment coach, and how a coach provides superior benefits to the investor. The differences are striking!

Financial planning used by brokers is often just a disguise to sell high commission inferior financial products that are not truly in your best interests. The financial plan is not for you (the client)… it’s for the planner to sell product. More often than not, free financial plans are marketing schemes to sell commission products that may not be in your best interests. Know that the planner can manipulate the numbers with just a few small adjustments to help sell his product (garbage in garbage out). The financial planning industry is also in alliance with the media due to huge advertising dollars. Commission driven planning is a huge potential conflict of interest. Even when dealing with planners that have good intentions, when forced to choose between you and their own self interests (mortgage, bills, etc…) they sometimes choose their own self interests over yours. Selling by brokers and planners pushes past performance and or hot products because they are easier to sell. This can unknowingly increase your risk.

Coaches help solve the problems brokers and planners create. Coaches also provide the discipline necessary to be a successful investor. There will be times in the future where your emotions will be tested. A coach will keep you on the right track. The four simple rules of investing demand discipline.

Here are the four simple rules: 1. Own equities in free market countries around the world, and reduce risk to the extent necessary for your individual risk tolerance with shorter term higher quality bonds from around the world (no junk bond risk, no extreme long term bond risk). 2. Reduce internal costly trading expenses and taxes from excessive turnover by money managers. 3. Diversify broadly around the world in free market countries using index type funds. 4. Rebalance on a consistent disciplined basis. Rebalancing is a sell high, buy low

5

discipline that increases the return potential, and helps to reduce risk and volatility over time. Rebalancing is key to the strategy and takes the emotions out of the decision making process.

All of these rules sound simple enough. However, it isn’t knowing the rules that is hard; it’s consistently following them that challenges most people. When people make investing decisions about the future based on track-record or emotions, without realizing it, they wind up breaking these rules, thereby sabotaging their portfolio. In the area of weight-loss for example, the rules are straight forward… eat less and move more. Investing, diet and exercise all take discipline, patience, and commitment. If investing, diet and exercise were easy, we would all be rich and skinny.

This strategy also removes other types of risks… the risks of picking the right stocks, picking the right mutual fund manager, picking the right sectors, or incorrectly timing the markets, any one of which can be costly. It is important to know that we don’t need to pick stocks, pick managers, pick sectors, or time the market to be successful investors. Market returns are there for the taking and we intend to capture the worldwide market returns (according to your individual risk tolerance). However, we do need discipline, which is where my partner Scott Buchanan and I come in as investment coaches to help keep you on track. Whether it’s investing, diet, exercise, sports or education, discipline and a good coach is crucial to success. Coaches provide the discipline necessary to be a successful investor.

There is a massive amount of information on the internet and in the media which is bound to leave you confused and scared. A coach can help you wade through the nonsense and focus on the best way to reach your goals. A coach can make the investing process, not just easy to understand, but provide a level of clarity that few individual investors enjoy in today’s murky financial landscape. Every great athlete needs a coach to achieve peak performance… doesn’t your financial future and portfolio deserve the same level of attention?

John Borger and Scott Buchanan

“A coach is someone who sometimes must tell you what you don’t want to hear, who has you see what you sometimes can’t see, so you can become the best you can be.”

6

Do you ever worry about…

Getting high enough returns on investments? Maintaining your standard of living at retirement? Affording high quality education for children? The next market crash? The next market boom? Missing out on the latest, greatest stock tip? Making sense of all the information available? Someone else having a better portfolio than you? Not having money to care for your loved ones? Getting bad advice and, worse yet, paying for it? Buying high and selling low?

If you answered “yes” to any of these questions, you could be trapped in the Investors’ Dilemma. Each of these questions simply represents a symptom of a much larger problem—what I call the Investors’ Dilemma. Once you understand the phases of this cycle and what happens to your investments as a result, you will gain a whole new perspective on investing.

7

The Investors’ Dilemma Is A Vicious Cycle That Can Stop Your Portfolio Dead…

No matter how well it has been designed and implemented, an investment strategy by itself can never bring you peace of mind. Although most of the financial world likes to pretend that investment decisions are based purely on logic and rational thought, the truth is that the vast majority of investment choices are driven by emotional and psychological factors.

The Dilemma outlines the typical process investors go through when facing important financial decisions. Let’s look at how each phase of this cycle works against your ultimate financial well-being:

The Phases of the Investors’ Dilemma

1: Fear of the Future

The cycle begins with a sense of uncertainty about the future. You might have questions about your financial future, such as:

• “Will there be enough money to maintain my standard of living?” • “How much should I save?” • “How do I know which investment will get the best returns?” • “How much risk should I take?”

8

The list goes on and on, but the common quality is that almost all investors are afraid that either they don’t know enough or haven’t saved enough and, as a result, will find themselves destitute and powerless in the future.

You might not even be fully aware of the impact these fears have on your life, because it lurks under the surface in your subconscious. Fear plays a large role in dictating how investors feel as well as how they behave.

2: Forecasting the Future

Based on this inherent fear and uncertainty, many investors feel the need to get some kind of prediction about what’s going to happen in the future. After all, if someone could just tell us what is going to happen with inflation, long-term interest rates, share prices, overseas markets, etc., then there would be nothing to fear. Along these lines, it is easy to be convinced that someone else really does have the information, power, and insight to forecast the future. You could become an innocent victim of wish fulfillment. It would be so much easier if someone really had the answers; it is easy to lose sight of the simple fact that it is just not possible to predict the future.

This explains why people are clamoring around investing programs broadcast regularly on CNBC, eagerly subscribing to Money magazine and voraciously perusing the Internet in search of the next hot stock tip.

Why do investors and advisors believe in stock picking, market timing and track-record investing?

Believing that someone out there, whether it’s you, or the broker, or some money manager who’s on the cover of a magazine, can actually predict and forecast the future and pick all of the best stocks and post massive returns, is not the folly of weak minds. It is most often the folly of the most brilliant minds. The Greeks called this phenomenon hubris. This is exaggerated pride or self- confidence. People who have very high intellect often feel they can beat all kinds of games. They feel they can beat Vegas odds. They feel like they can pick the winner of the Super Bowl. They feel like they can consistently pick the best stocks.

The Good News:With the proper tools, strategies, and information you can achieve a level of confidence and peace about your financial future that you never knew possible... Just imagine what life would be like if you were able to overcome your fears about your financial future.

9

The greatest fallacy in the investing industry is that this superior

performance is a factor of skill and not luck.

This is not something that only weak minds or people who aren’t intelligent fall into. It’s easy to fall into these traps when they’re so pervasively put out there by the financial community, the media, and the public at large.

The Good News:You don’t have to have an accurate prediction about the future to be a successful investor.

For example, Isaac Newton discovered gravitation, or gravity. He is the father of modern mathematics. He invented differential calculus and used this new form of math to reveal and explain the movements of the planets. He is on a level with Einstein in intellect and brilliance. He was a true genius, without equal. In his master work, the Principia, Newton writes, “Supposing the centripetal force to be proportional to the distance of the body from the center, all bodies revolving in any planes whatsoever, will describe ellipses, and complete their revolutions in equal times, and those which move in right lines running backwards and forwards alternatively, will complete these several periods of going and returning in the same times.” This is the stuff that rocket scientists use to calculate the trajectory of rocket ships, satellites, and the space shuttle. But even Newton fell from stock picking grace as overconfidence and hubris brought him back to earth. Sir Isaac Newton lost a huge amount of his wealth, two thousand pounds, in the South Sea bubble. You can think of it as very similar to the tech bubble that many people lost massive amounts of their wealth to during the first part of the 2000s.

So here we have the person that invented modern mathematics, calculus, gravitation equations to calculate the movement of the planets, and he gets duped into speculating with his money.

Because man has used his intellect to reveal so much of the universe, and science has accomplished so much, it is easy to believe that if intellect can accomplish all of these things, then surely it should be able to be used to do something as simple as picking the best stocks.

This is not the folly of weak minds. It’s the folly often of the most brilliant, sophisticated, articulate minds.

10

3: Track-Record Investing

But, if you did need a prediction about the future, what would be the most logical place to look for it? History… experience… in other words, the past.

In investing, looking to the past to get an idea of what investments or managers will do well in the future is called Track-Record Investing. For example, looking for managers or funds that have recently outperformed the market hoping that those same managers will continue to do the same in the future.

A glaring example of the futility of the track-record approach to investing would be the run on Technology and U.S. Large stocks in the late 1990s. Following several years of impressive returns, investors actually felt “safe” stockpiling these types of investments in their portfolios. Using the track-record perspective, it seemed as if there was a possibility that these particular investment vehicles had qualities that would allow them to defy the rules of investing.

The media blitz certainly did nothing to deter the illusion that perhaps finally investors had found the golden “low-risk, high return” investment for which we all yearn.

4. Information Overload

The pull toward track-record investing is exacerbated by the barrage of information thrown at the average investor today. Most of us were taught to study, research, and gather as much information as possible prior to making financial decisions. In the past, this kind of investigation and analysis was required in order to feel confident about investing choices.

However, information today is so readily accessible that most investors get more information than necessary without even trying. Although the culture in which we live provides an abundance of information, often investors remain stuck in a scarcity mentality, frantically acting on a need to seek more, better, or different information, regardless of its usefulness.

Currently, when you look for the word “mutual fund” on any Internet search engine, you will find more than 12 million pages to peruse. In the quest for peace of mind, investors are compelled to expose themselves to books, newspapers, magazines, financial talk shows, advertisements, friends’ experiences, the Internet, and more. Some even worry that if they aren’t

The Good News:Track-record investing is not the answer to implementing a successfulinvestment strategy.

11

The Good News:Track-record investing is not the answer to implementing a successfulinvestment strategy.

We as people are naturally predisposed toward or against specific investing tactics. What is interesting is that no matter what our emotional tendency may be, we can almost always find what looks like purely factual data to support our view. It’s easy to overweight information that validates our perspective while minimizing any information that goes against what we inherently believe.

The Good News: If you know the RIGHT things, you don’t need to know EVERYTHING.

5. Emotion-Based Decisions

You never can overcome your own humanity. As much as we would prefer to think that we make investment decisions based purely upon logic, advertisers and journalists are well aware that emotion ultimately drives most investment decisions.

As a quick demonstration, consider the statements below. See if you can match each statement with the emotion being expressed (answers listed in the key below).

regret

greed

trust

loyalty

envy

1. “It doesn’t matter how sophisticated his charts are or how much sense he makes, I just don’t feel comfortable letting him handle my money.”

2. “I’m not sure if I should have put my money in that fund. It lost 15% already. Maybe I’ll sell some of it tomorrow.”

3. “My boss got 25% on his money. I only made 8%! I wish I got 25%.”

4. “I wish I’d known that stock was going up, I would have bought more shares.”

5. “My dad worked in that company all of his life and left his money to me in his will. It would be wrong to sell it just to diversify my portfolio.”

Answer key: 1. trust 2. regret 3. envy 4. greed 5. loyalty

hooked in 24-hours per day, seven days a week, they will miss out on valuable information that could mean the difference between wealth and poverty.

Instead of reducing fears and doubts about investment decisions, this deluge of information only intensifies investors’ anxiety. They are on overload.

12

6: Breaking the Rules

As in any endeavor, there are certain accepted rules that can simplify our ability to achieve success. In the area of weight-loss, for example, the rules are straightforward: 1. Eat less 2. Move more.

The rules are not much more complex when it comes to investing. The commonly held rules of investing are:

1. Own equities 2. Diversify 3. Rebalance.

And, the “golden rule” of investing is:Buy when prices are low and sell when prices are high.

All of these rules sound simple enough. However, it isn’t knowing the rules that is hard; it’s consistently following them that challenges most people (in weight loss or investing). When people make investing decisions about the future based on track-record or emotions, without realizing it they wind up breaking these rules, thereby sabotaging their portfolio.

7: Performance Losses

Put all the phases of the Investors’ Dilemma together and what you get are performance losses. Simply stated, investors fail to capture the kind of returns they expect. Typically, they expect to get the returns they see listed in the newspaper, online, or in magazines; however, it is rare that the average investor actually achieves the same returns as published in the newspaper.

Dalbar, Inc., a leading financial-services research firm, has demonstrated an investor’s performance does not equal investment performance. In 2000, Dalbar found the following annualized returns for investors, whose average holding period for a mutual fund was 2.6 years:

• The average equity mutual fund investor realized an annualized return of 5.32%, compared to 16.29% for the S&P 500.

• The average fixed-income investor realized an annualized return of 6.08%, compared to 11.83% for the Long-Term Government Bond index.

• The average money-market fund investor realized an annualized return of 2.29%, compared to 5.82% for Treasury Bills and 3.23% for inflation.

The Good News:With the proper investment strategy, your portfolio could be set up to follow the rules without interference from emotional decisions.

The Good News:Simple awareness of your emotions when it comes to financial and investingmatters can make the difference between good and bad investment decisions.

13

The Good News:Simple awareness of your emotions when it comes to financial and investingmatters can make the difference between good and bad investment decisions.

Ending the Investors’ DilemmaHere are some “Do’s” and “Don’ts” to help end the Investors’ Dilemma:

Don’t focus on returns and track- records (i.e. Morningstar five-star funds).

Do focus on maintaining long-term discipline.

Don’t use actively managed funds.

Do use structured or index-type funds.

Don’t use a commission-based broker or planner.

Do find an investor coach who will work with you to find answers to key investing questions.

Don’t rely on the media for advice regarding your investments.

Do find an investment strategy that fits you and stick with it.

Don’t let your emotions dictate how you manage your investments.

Do let your investment strategy do its job and keep disciplined.

These numbers ruthlessly make their point. As a result of each of the phases of the Investors’ Dilemma, investors are continually getting in and out of the market, each time chinking away at prospective (and frequently expected) returns. This specifically can be seen in the case of those who attempted to ride the wave of Technology stocks. Sadly, some of these investors lost between 20-70% of their wealth practically overnight.

Obviously, when this effect is compounded over a period of years, the potential for reaching financial goals is significantly decreased. These kinds of losses can’t help but create additional frustration and fear about the future, thereby initiating the Investors’ Dilema cycle all over again.

The Results:

Not Enough Money and No Peace of Mind

In the end, the result of The Investors’ Dilemma is people who don’t have enough money to accomplish their most meaningful life goals and dreams. Not only are they not where they want to be financially, but they have also spent a large portion of their lives fraught with stress, anxiety, concern, and fear that initiate and perpetuate the dilemma.

With Knowledge And Guidance, It Really Is Possible To Experience The Peace Of Mind That Comes With A Lifelong Investment Strategy And End The Investors’ Dilemma Forever.

14

Three Simple Strategies For Investing Success

Strategy One: Eliminate Speculating and Gambling in your Portfolio

Never allow anyone to speculate or gamble with your money!

Anytime you pay a fee or a commission to “active” managers to pick stocks that they believe will beat the market, you are, in effect, gambling that those stocks are the winners and that others are the losers.

The first power strategy is to stop this self-destructive behavior once and for all. In life, it is often just as important to stop doing the wrong things, as it is to start doing the right ones.

Again, take dieting as an example. Of course it is important to start eating the “right” kinds of food. But it is equally important to stop eating massive amounts of cake, cookies, and ice cream. To be successful you must simultaneously identify healthy and empowering activities and start consistently implementing them into your life, and also identify destructive behaviors and work to eliminate those. Both must become a new part of your thinking and behavior if you are going to get long-term health benefits. Investing works the same way.

You must eliminate speculating and gambling with your money, stock picking, market timing,

and chasing performance.

A Dalbar study found that the S&P 500, over a 20-year period averaged 11.81%. The average investor, investing in mutual funds trying to beat the S&P 500, made a meager 4.48% over the same 20-year period from 1988 through 2007. Why? It was because of their behavior.

They bought a fund manager’s performance and mutual funds that had gone through a good 5 or 10-year period, thinking that it was the fund manager’s superior ability that produced the returns. In reality, it was the underlying asset category that accounted for the results. With the desire to achieve superior returns, average investors then placed their assets with these top managers all in one asset category! Investors are often unaware of the fact that they could lose 20-50% of their money.

15

After massive losses, the resulting panic and fear then caused them to sell their funds and invest in other assets that were now up, thereby repeating the destructive cycle.

Of course, every time this cycle happens it makes more profit and commissions for the brokerage firms. Win or lose, the brokerage company takes its cut. The brokers always take the house cut no matter what the investor makes or loses.

The first step for having a successful investment experience is to eliminate these destructive behaviors. Stop stock picking, market timing, and track-record investing. Stop gambling with your investment capital!

Strategy Two: Use market forces. Don’t fight them.

In a free, capitalistic society the capital market rates of return are there for the taking. The basic underlying working mechanism of capital markets is to earn a return on your investment capital.

Companies that have a desire to raise capital in order to grow their operations must raise it somewhere. In return, they reward investors willing to provide funds for operations and expansion with a return. It is a beautiful thing.

For companies trying to raise money, this is called the cost of capital. For investors or banks willing to provide this money, it is called the return on capital. In theory, the more risk a company has, the higher the expected return to investors. In essence, the cost of capital is the investors’ return on capital.

Don’t fight market forces by attempting to beat the market, because the vast majority of hyperactive managers fail to achieve market returns. Harness the power of free markets by owning structured market portfolios that are designed to deliver market rates of return. These funds are typically available to only the most sophisticated investors. These funds buy a cross section of stocks in any given asset category, and often employ highly effective trading strategies to minimize trading costs to the portfolio. Investors often are surprised and delighted to learn how generous market rates of return have been over long periods of time. The following graph lays out the returns from various free markets. Remember, there is absolutely no stock picking or market timing required historically to achieve these returns.

This is the only formula as an investor you will ever need to know: Cost of Capital = Return on Capital.

16

Annualized Capital Return

US Micro Cap Stocks 11.83 1927-2008

S&P 500 (Large US) 9.60 1927-2008

Small Cap Value 14.62 1927-2008

Large Value 11.65 1927-2008

International Small Companies 14.29 1970-2008

International Large Companies 9.66 1970-2008Performance figures taken from Dimensional Fund Advisors, Inc. (DFA) Returns software 12/31/08. Some data provided to DFA by the Center for Research & Security Pricing (CRSP), University of Chicago. Asset Classes defined as: S&P 500 Index for U.S. large stocks, CRSP 9-10 Index for U.S. micro cap stocks, Morgan Stanley Europe, Australia, Far East (EAFE) Index for international large stocks, and the international small stock index created by DFA using CRSP data.

CRSP Large Value Index for Large Value and CRSP Small Value Index for Small Cap Value.

Most investors have failed by a long shot to achieve these types of returns. Based on the Dalbar Study, the average investor has failed by approximately 10% per year! Research shows the average active mutual fund underperforms the market by two to three percent per year. If the market has historically earned double-digit rates of return and the average investor just 4.48%, that means the investor’s own behavior accounts for roughly a loss of 7% per year. Accepting this fact, your job of allocating assets is greatly simplified. You only need to allocate your assets into various asset categories to achieve market returns and remain disciplined over long periods of time. This is easier said than done, and most often requires the aid of a coach.

By focusing on market returns, there is no stock picking at all. No forecast, no prediction. There’s no gambling on beating the market. You just own as many stocks in that asset category as possible. That’s what we talk about when we talk about market rates of return.

Power Strategy Three: Hire a coach

Just as you would hire a coach to improve your golf swing or your tennis game, an investing coach can help you maximize the benefits from your investment strategy.

A coach can help you make the prudent decisions about how much volatility and what types of risk you want to incorporate into your portfolio. He or she helps you to distinguish prudent from imprudent risk. A good coach also aids you to truly understand and measure diversification in your portfolio, and works with you on what you really want your money to do in the future.

17

What does your money really have to do to bring you peace of mind?

Coaching helps you focus on your values and creates a powerful vision for the future that can be used to transform your life and expand your experience of money and investing to abundance. The most common result I see from the traditional commission-driven financial planning process is fear, anxiety, confusion, complexity, and a reduced ability to take action on your own behalf. A coach helps you wade through all of these very complex issues and maintain long-term discipline around the investing process. Ultimately, investing is a people problem, not necessarily a portfolio problem. Another thing that a coach will do is make independent recommendations. These are not based on commission, but based on doing what is in your best interest.

The Answers Lie In Asking The Right Questions

What are the right questions that every investor needs to answer to gain true peace of mind?

Classic wisdoms teach us that learning and growth come from asking questions. With that in mind, I’ve created The 20 Must-Answer Questions for Peace of Mind. The bad news is that few investors can successfully answer “yes” to all, or even a majority of them the first time they see or hear them. The good news is that with the support of a coach, you can find the answers to each and every one.

The answers to these questions are critical for your success and they will be unique to you. No two investors will have the exact same answers—they are yours and yours alone. As you read through these, I encourage you to be rigorously honest. To answer “yes” it must be a 100% “yes”; no fuzziness or doubt. If you have any doubt about the question, it must be answered “no.” It will be your coach’s job to help you achieve a perfect score. Let’s begin.

18

The 20 Must-Answer Questions

1. Have you discovered your True Purpose for Money, that which is more important than money itself? Yes No This is the very heart of your most sacred values. What is it that you value more than money itself? Most investors get caught up in investing their money for money’s sake. The more the better, and the end game is to have the most. Your True Purpose for Money is the compass and foundation from which all spending and investing decisions are formed. Every investor has one, but often it takes some focus and development to clarify it into a laser-focused tool for personal and portfolio growth. This is the first step in developing true peace of mind.

2. Are you invested in the Market? Yes No Do you own stocks, or preferably, stock-based mutual funds? Most investors can answer “yes” to this question.

3. Do you know how markets work? Yes No While most investors answer that they do have money in the market, very few can honestly say that they truly understand the dynamics of how free markets price securities. They are, in effect, ignorant of the forces that ultimately determine their investing results. You can easily see how having wealth in something that you do not understand would be extremely disturbing, especially when markets take large losses. Never put your money in anything you do not truly understand—that includes the stock market! It is your coach’s job to help you focus on the right things so that you do not have to focus on everything.

4. Have you defined your Investment Philosophy? Yes No Everyone knows that it is important to have basic philosophies of life to simplify making complex decisions. For example, it is critical to have basic underlying philosophies of religion, business, education, and even the nature of good and evil. Most people do not even know that it is possible to have a philosophy when it comes to the field of investing. It is possible and critical to success. Most people choose an investment strategy without an underlying philosophy. To be successful, a philosophy must be developed and instituted first.

There are two basic market philosophies: markets work and markets fail. It is your job to understand what each means and choose the one that is appropriate for you. Don’t forget to use your coach.

19

5. Have you identified your personal risk tolerance? Yes No This is an academic and scientific number that helps you compare various investment scenarios. It is essential that risk is not simply dispatched in generic terms and left without being quantified. Remember, you cannot successfully control something that you cannot measure. Risk must be measured to be used properly. It is important to have your existing portfolio analyzed by an independent coach to properly identify the types and extremes of risk in your current assets.

6. Do you know how to measure diversification in your portfolio? Yes No Everyone knows it is prudent to diversify, but how do you measure it? Academic and economic scientists use a very specific measuring tool called correlation to determine if your portfolio has been properly built. If you do not know specifically, chances are you are not truly diversified. In the typical portfolio, assets tend to move in a step-rate fashion so that when one crashes, they all crash. To diversify the right way, you must be able to measure it.

7. Do you consistently and predictably achieve market returns? Yes No Most people don’t even know what market returns are. After reading this guide, you should have a good idea. Your next step is to analyze your current holdings to see if they have consistently held up to the returns of the asset categories you are in during the periods you have held them. The odds are against you, and you have probably lost to the market. It is easy to find managers who had top performance in the past; it is all but impossible to pick them in advance with any consistency.

8. Have you measured the total amount of commissions and trading costs in your portfolio? Yes No Even if you own a supposedly “no load” mutual fund, the internal commissions could be more than you could ever imagine. Without an independent analysis, you will never know or understand what these hidden costs are doing to you and your portfolio. What you can’t see, can hurt you. Burying your head in the sand and staying in the dark is not the solution. Your coach will give you an independent analysis and show you how commissions and trading costs kill off your returns.

9. Do you know where you fall on Markowitz Efficient Frontier? Yes No I would be amazed if you did because most people don’t even know that Harry Markowitz, the economist who developed this Nobel Prize-winning investment tool, even exists. Yet, the most sophisticated investors have been using this tool to build better portfolios for over a decade now. This economic study allows a coach to help you see exactly how much volatility and expected return your existing portfolio has, and allows you to compare other mixes.

20

10. When it comes to building your investment portfolio, do you know exactly what you are doing and why? Yes No Investing can be very confusing, even for professionals. Rare indeed is the investor who knows his True Purpose for Money. Rarer still is the investor who knows what all of the hidden costs are, what the true risk profile is, and how diversification works in his portfolio. Much of their results are left to chance, or worse yet, the commission-driven financial plans of an advisor or broker. Most investors simply throw up their hands in disgust and frustration from trying to grasp it all. It doesn’t have to be that way.

11. Are you working with a financial coach versus a financial planner? Yes No A good investment coach will help you, first, by answering all of these questions. If you cannot answer yes to most of them, chances are you are not working with a coach. As an investment manager, if I didn’t first know the answers to these questions before I invested my wealth, I wouldn’t sleep at night. I would feel totally out of control and in the dark.

12. Do you have a customized lifelong game plan to guide all of your investing and spending decisions? Yes No This strategy integrates your life goals, visions, dreams, values, and investment risk and return preferences into a total plan for success. Money serves no purpose at all, unless it helps you to live a more powerful and dynamic life. By creating this lifelong game plan, your money and life will take on more purpose and direction.

13. Do you have an Investment Policy Statement? Yes No The great football coach Vince Lombardi left nothing to chance and created masterful game plans in advance that took into account every possible eventuality of the game. In other words, good or bad, he always had a plan to guide him to victory. He never panicked. That is exactly what an investment policy statement can do for you. It lays out the game plan for any and all market outcomes. No matter what happens to the market, you are prepared in advance. It also spells out how much risk and return you are targeting, and your time horizon. If you do not currently have one, that is a serious flaw in your investing process. 14. Have you devised a clear-cut method for measuring the success or failure of your portfolio? Yes No How do you know that your portfolio is doing what it is supposed to do? If you make 15% is that good, or if you lose 10% is that bad? What benchmarks do you compare it to? How do you know if it is working?

21

15. Do you fully understand the implications and applications of diversification in your portfolio? Yes No How do you know if you are diversified? How do you measure it? What is your portfolio likely to do during various market cycles? What is your worst-case scenario for your portfolio, and what is the best? Historically, what is your worst and best five-year performance? These all are questions you should be able to address if you have properly built-in diversification in your portfolio, and you understand how it really works.

16. Do you have a system to measure portfolio volatility? Yes No Scientists measure variability of outcomes with the statistical measure of Standard Deviation. How do you measure it? It is actually possible to use statistics to examine volatility, the key measure of risk, with the same analysis that won the Nobel Prize for Harry Markowitz. Without this measurement, you are flying blind. It is the foundation of prudent and sound investing. If your planner or broker did not educate you about standard deviation, this should be a big red flag that tells you something is missing. Your coach can help you fix this problem.

17. Are you aware of the incentives brokerage firms and the financial community have when selling commission-based products? Yes No The large financial institutions create the illusion that, by using their research, it is possible consistently and predictably to make superior returns. Are you aware of how they use the media and advertising to create the illusion that they can do something that is, in reality, smoke and mirrors? By understanding all of the techniques they use to persuade investors, you can avoid many of the deadly investor traps.

18. Do you know the three warning signs that you are gambling and speculating with your money versus prudently investing it? Yes No They are stock picking, market timing, and track-record investing—otherwise known as chasing performance. With the help of a coach, you can discern if you have accidentally fallen into these destructive investor behaviors and traps.

19. Can you identify the cultural messages and personal mind-sets about money that destroy your peace of mind? Yes No

Money can be a great blessing or a corrosive and divisive burden. Many of the mind-sets and beliefs that you may have about money can destroy your ability to use it as an empowering

22

tool in your life. By understanding these biases, you can effectively choose more powerful beliefs to alter your relationship with money and how you use it in your life. 20. Are you ready to shift your personal experience of money and investing from a scarcity mode to an abundance mode? Yes No Scarcity means “not enough.” When you experience money in this mode, the outcome is doubt, regret, and often, fear. Money frequently is felt to be a negative and frustrating thing to deal with. In scarcity mode, no matter how much money you have, it is never quite enough. Money is experienced as a painful event.

This is often felt after large unexpected portfolio losses. By shifting your experience of money to an abundance mode, you now are able to experience your wealth as “more than enough.” This is the only question you must be able to answer “yes” to now, so that you may work with a coach to transform your investing experience from scarcity to abundance.

Your Next Step

Knowledge without action is useless. Your next best step is to contact your financial coach and schedule a meeting to begin answering these questions today.

Don’t put it off; it is too important. You owe it to yourself and your loved ones to find out the

answers to these questions. The most dangerous and devastating problems in life are the ones you do not know exist. You cannot fix a problem that you don’t know you have. The first step of solving any problem is to identify and quantify its destructive effects.

Your coach has been trained and educated in the art and science of walking you through the process to resolve these problems. Coaching is the solution.

Call your coach today to schedule your Investor Inventory.

23

24

25

KYC-AGWBv102009-JBSB

Mark Matson is CEO and founder of Abundance Technologies, Inc., a registered investment advisor company that manages in excess of $2.2 billion, and is The Abundance Coach. With extensive experience in both financial planning for investors and coaching for advisors, Mark innovated the Investor Coach ApproachTM, a repeatable system for financial professionals to escape the Seven Deadly Traps by building lifelong client relationships. He also created the Curriculum for Conscious InvestingTM, the only program ever designed to combine financial planning and coaching into an extended investing process.Passionate about delivering his message, Mark shines in the training programs he leads for financial advisors and investors. His ability to simplify complex investment subject matter is illustrated in the unique training concepts that impact hundreds of attendees in programs for either advisors or investors.

Investors and financial professionals nationwide have experienced Mark in print, audio, and video:BOOKS: FlashPoint: Mastering the Art of Economic Abundance and The Dirty Filthy Lies My Broker Taught Me and 101 Truths About Money & Investing.ARTICLES: USA Today, Financial Services Advisor, Advisor Today, Personal Financial Planning Monthly...and many more.AUDIO: Mind over Money, Taking Stock, Breakthroughs & Beyond, The Curriculum for Conscious Investing, and The Investor Education Series.VIDEO: How the Really Smart Money Invests.Mark is a proud husband of Melissa and father of six children. He is an avid cyclist and trains constantly for challenging races.He possesses a degree in both Finance and Accounting from Miami University in Oxford, Ohio. Mark has an active interest in science and history, and incorporates his love for these disciplines into his coaching and life strategies for both advisors and investors alike.

John BorgerJohn specializes in assisting retirees control risk through diversification and discipline. Having personally trained many financial professionals, John has undergone extensive financial product training. John completed his CFP® course work through the American College and received his CERTIFIED FINANCIAL PLANNER™ certification in 2004. John is a co-founder of Royal American Financial Advisors, founded in 2000. John lives in Menifee, California with his wife Cara and his sons Tyler and Trevor.

Scott BuchananScott has made his priority to help his clients prevent costly financial mistakes. Scott believes selecting quality investments and preventing unnecessary losses is the mark of a good advisor. Scott is dedicated to helping his clients reduce risk, enhance returns, and avoid common costly financial mistakes. Scott is actively involved in his community striving to make the world a little better through his efforts. Scott is dedicated to his wife Kara, son Ryan and daughter Isabella.

Royal American Financial Advisors27192 Newport Rd., Suite 4

Menifee, CA 92584 P: (951) 679-2065